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This video tutorial focuses on working with formulas in Word. While Excel is best for complex calculations, simple calculations can also be done in Word by clicking OK. There are two types of cell references: cell reference (e.g. A1, B1) and row column reference (e.g. Row 1, column 1). Adjusting values in the cells automatically updates the total amount, triggering the IF function to return $25 for shipping fees if the total is less than $500. To complete the task, a grand total needs to be calculated by adding the total and shipping fees.